Bryan Day Charged by a Federal Grand Jury in an Indictment Alleging a $1 Million Medicare Fraud Scheme

May 2, 2012

The Federal Bureau of Investigation (FBI) on May 2, 2012 released the following:

“Chicago-Area Man Charged in $1 Million Medicare Fraud Scheme

CHICAGO— A south suburban resident who purported to provide psychotherapy services to Medicare patients was charged with participating in a $1 million health care fraud scheme, the Departments of Justice and Health and Human Services announced today.

The defendant, Bryan Day, 42, of Richton Park, who is not a licensed medical professional, operated and was part owner of Charm Development LLC, located in Chicago Heights, which purported to provide psychotherapy services to patients, primarily in nursing homes and long-term care facilities. Day was charged with six counts of health care fraud in an indictment returned by a federal grand jury last week and announced today by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Lamont Pugh III, Special Agent in Charge of the Chicago Regional Office of the HHS-OIG; and Robert D. Grant, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.

Day is scheduled to be arraigned at 1:30 p.m. May 14 before U.S. District Judge Virginia Kendall in federal court in Chicago.

The indictment alleges that between January 2008 and June 2009 Day submitted fraudulent claims to Medicare totaling $1,078,733, and caused Medicare to pay approximately $438,852. Day allegedly submitted claims for individual psychotherapy services purportedly performed by Doctor A, knowing that Doctor A did not provide the services claimed. In addition, the claims included services that were purportedly provided at times when Doctor A was not present at Charm and not licensed by the state of Illinois. The claims also included services that were purportedly provided by Doctor A after Doctor A was no longer employed by Charm, and Day allegedly submitted Medicare claims for services purportedly rendered by Doctor A in excess of 24 hours a day.

According to the indictment, Doctor A was licensed to practice medicine in Illinois until July 31, 2008, and Doctor A was employed by Charm from May 2005 until February 2009.

The indictment seeks forfeiture of approximately $438,852. The government is represented by Assistant U.S. Attorney Michael J. Chmelar. Each count of health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine, or an alternate fine totaling twice the loss or twice the gain, whichever is greater. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

An indictment contains merely charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The case is part of a nationwide takedown by Medicare Fraud Strike Force operations in seven cities that led to charges against 107 individuals for their alleged participation in schemes to collectively submit approximately $452 million in fraudulent claims to Medicare. This takedown involved the highest amount of false Medicare billings in a single takedown in Strike Force history.

“The results we are announcing today are at the heart of an Administration-wide commitment to protecting American taxpayers from health care fraud, which can drive up costs and threaten the strength and integrity of our health care system,” said Attorney General Eric Holder. “We are determined to bring to justice those who violate our laws and defraud the Medicare program for personal gain. As today’s takedown reflects, our ongoing fight against health care fraud has never been more coordinated and effective.”

The Medicare Fraud Strike Force operations, which expanded to Chicago in February 2011, are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Approximately three dozen defendants have been charged in health care fraud cases since the strike force began operating in Chicago last year.

Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,330 defendants who collectively have falsely billed the Medicare program for more than $4 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Robert D. Falor Indicited by a Chicago Federal Grand Jury for Alleged Federal Tax Evasion

September 2, 2011

The U.S. Attorney’s Office Northern District of Illinois on September 1, 2011 released the following:

“FORMER CONDO-HOTEL DEVELOPER ARRESTED ON FEDERAL CHARGES ALLEGING EVASION OF MORE THAN $1.75 MILLION IN INCOME TAXES

CHICAGO — A former real estate developer who attempted to convert hotels in Chicago, Miami Beach and elsewhere into condominium-hotels was arrested today on federal tax evasion charges alleging that he failed to pay more than $1.75 million in taxes covering three years between 2004 and 2007. The defendant, Robert D. Falor, who was the chief operator and manager of The Falor Companies, Inc. (TFC), was charged with three counts of federal income tax evasion in an indictment that was returned by a federal grand jury on Tuesday and unsealed today following his arrest.

Falor, 43, of Chicago and formerly of Glencoe, pleaded not guilty at his arraignment this morning before U.S. District Judge Virginia Kendall, who scheduled a detention hearing for 10 a.m. tomorrow in Federal Court in Chicago.

The arrest and charges were announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Alvin Patton, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Thomas P. Brady, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. The investigation is continuing, they said.

According to the indictment, Falor was an owner of multiple businesses, including limited liability companies, that he and others created to own and manage the affairs of various TFC condohotel properties. In converting hotels to condo-hotels, individual guest rooms would be sold to investors as separately titled condominium units and rented by a TFC-related hotel management company to guests when the owner was not in residence, with the owner receiving a percentage of the rental fee.

Falor operated multiple condo-hotel ventures in the mid-2000s, including the Blake Hotel, located at 500 S. Dearborn St., in Chicago, and the Tides Hotel on Ocean Drive in Miami Beach, but TFC ceased business operations in 2006, according to the indictment.

The tax evasion counts allege that Falor failed to pay the following amounts in federal income taxes: $189,246 for calendar year 2004; $494,261 for calendar year 2006; and $1,091,216 for calendar year 2007, resulting in a total of $1,774,723 in unpaid taxes. For 2006 and 2007, Falor allegedly evaded taxes, in part, by failing to file federal individual income tax returns. For 2004, he filed a tax return in October 2007 that allegedly under-reported his income and the amount of taxes he owed.

During 2007, the indictment alleges that Falor had two sources of unreported taxable income: more than $2.3 million from the Blake Hotel and more than $2.9 million in capital gains resulting from the dissolution of certain limited liability companies. Falor allegedly deposited the $2.3 million of income from the Blake Hotel into various bank accounts through a series of more than 200 banking transactions. During 2007, he had taxable income of approximately $4,837,308, on which he owed income tax of approximately $1,091,216, the indictment charges, adding that he failed to file a return or pay any taxes by the deadline.

During 2006, Falor allegedly received taxable income of more than $1.25 million from the Blake Hotel. In addition, more than $1.65 million in loans from TFC became taxable income to Falor in 2006 because he failed to repay the loans when TFC ceased operations. The loans had accrued to Falor between 2003 and 2006 when he directed TFC employees to pay his personal expenses from company accounts and to record the payments as loans, the indictment states. During 2006, he had taxable income of approximately $1,825,326, on which he owed income tax of approximately $494,261, the indictment charges, adding that he failed to file a return or pay any taxes by the deadline.

During 2004, the indictment alleges that Falor had three sources of unreported taxable income: approximately $1,294,424 in capital gains from the sale of certain interests in limited liability companies; approximately $472,955 in capital gains from a distribution from a limited liability company that participate din the management of the Tides Hotel; and at least $201,485 from certain companies that he deposited into a bank account he controlled. During 2004, he had taxable income of approximately $1,332,391, on which he owed income tax of approximately $189,246, the indictment charges. On Oct. 3, 2007, Falor allegedly filed an income tax return for 2004 that reported no capital gains and under-reported his income from various companies, resulting in a tax due of only $2,102, when he actually owed the greater amount of approximately $189,246.

The government is being represented by Assistant U.S. Attorneys Ryan S. Hedges and Barry Jonas.

Each count of tax evasion carries a maximum penalty of five years in prison and a $250,000 fine. In addition, defendants convicted of tax offenses face mandatory costs of prosecution and remain civilly liable to the Government for any and all back taxes, as well as a civil fraud penalty of 75 percent of the underpayment plus interest. If convicted, the Court, must impose a reasonable sentence under the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.”

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

Bookmark and Share